Get accurate financial statement
This article is the second part of a two-part series on penalties after incorporation of a company. You can read the first part of the article Penalties After Incorporation- Part I
Chapter VII to Chapter XII
| No | Section No and Description | Defaulting party | Civil Liability | Criminal Liability
(Imprisonment) |
| 34) | Sec 88 – Failure to maintain a register of members/debenture-holders/security holders | Company
Every officer in default |
Min: INR 50 thousand
Max: INR 3 Lakhs |
|
| 35) | Sec 89 – Failure to make a declaration in respect of a beneficial interest in any share.
Failure to file return pertaining to the declaration with the registrar. |
Person
Company and Every officer in default. |
Max: INR 50 thousand
Continuing failure- INR 1 thousand for every day of default Min: INR 500 Max: INR 1 thousand Continuing failure- INR 1 thousand for every day of default. |
|
| 36) | Sec 91- Closure of register of members or debenture holders or other security holders without notice/shorter notice/ in excess of limits prescribed. | Company and Every officer in default. | INR 5 thousand for every day of default
Max: INR 1 Lakh |
|
| 37) | Sec 92 – Failure to file annual return. | Company
Every officer in default. |
Min: INR 50 thousand
Max: INR 5 Lakhs Max: INR 5 Lakhs |
Max: 6 months
OR Both |
| 38) | Sec 94 – Refusal of Inspection or making a copy/extract. | Company and Every officer in default. | INR 1 thousand for every day of default
Max: INR 1 Lakhs |
|
| 39) | Sec 99- Default in complying with
Sec 96 – AGM Sec 97 – Power of the tribunal to call AGM. Sec 98 – Power of a tribunal to call meetings of members OR Orders of Tribunal. |
Company and every officer in default | Max: INR 1 Lakh
Further INR 5 thousand for every day of default |
|
| 40) | Sec 102 – Failure to comply with provisions related to statement to be annexed to notice calling a meeting | Every promoter/director/manager/KMP in default | INR 50 thousand
or 5 times the benefit accruing to the persons mentioned in column (3) or any of their relatives Whichever is higher |
|
| 41) | Sec 105 – Failure to mention members eligibility to appoint a proxy. Wilfully/knowingly issues the invitation to appoint a proxy. |
Every officer in default
Every officer in default |
Max: INR 5 thousand
Max: INR 1 Lakh |
|
| 42) | Sec 111 – Failure to circulate members’ resolution | Company and every officer in default | INR 25 thousand | |
| 43) | Sec 117- Failure to file the resolution and agreement. | Company
Every officer in default(including liquidator) |
Min: INR 5 Lakhs
Max: INR 25 Lakhs Min: INR 1 lakh Max: INR 5 Lakhs |
|
| 44) | Sec 118 – Failure to maintain the minutes of proceedings of the general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot.
Guilty of tampering with the minutes of the proceedings of the meeting. |
Company
Every officer in default Person |
INR 25 thousand
INR 5 thousand Min: INR 25 thousand Max: INR 1 Lakh & |
Max: 2 years |
| 45) | Sec 119 – Refusal to inspect or copies not furnished within the specified time. | Company
Every officer in default |
INR 25 thousand INR 5 thousand |
|
| 46) | Sec 121 – Failure to file the report on AGM before the expiry of a specific period. | Company
Every officer in default |
Min: INR 1 lakh
Max: INR 5 Lakhs Max: INR 1 Lakh |
|
| 47) | Sec 124 – Default in complying with provisions related to Unpaid Dividend Account | Company
Every officer in default |
Min: INR 5 lakhs
Max: INR 25 Lakhs Min: INR 1 Lakh Max: INR 5 Lakhs |
|
| 48) | Sec 127- Punishment for failure to distribute dividends. | Every director in default
Company |
INR 1 thousand for every day of default & Simple Interest @ 18% p.a during the period for default continues |
Max: 2 years |
| 49) | Sec 128 – Failure to comply with the provision relating to maintenance of books of accounts etc by the company. | -Managing director
-Whole time director in charge of finance -Chief Financial Officer or such other person |
Min: INR 50 thousand
Max: INR 5 Lakh OR |
Max: 1 year
OR Both |
| 50) | Sec 129 – Failure to comply with provisions relating to proper disclosure of financial statements | -Managing director
-Whole time director in charge of finance -Chief Financial Officer or such other person in charge(as appointed by the board In the absence of any of the officers mentioned all the directors. |
Min: INR 50 thousand
Max: INR 5 Lakh OR |
Max: 1 year
OR Both |
| 51) | Sec 134 – Contravention of the provisions relating to Financial Statements, Boards Report Etc | Company
Every officer in default |
Min: INR 50 thousand
Max: INR 25 Lakhs Min: INR 50 thousand Max: INR 5 Lakh OR |
Max: 3 years
OR Both |
| 52) | Sec 136 – Denial of the right of the member to inspect copies of the audited financial statements. | Company
Every officer in default |
INR 25 thousand
INR 5 thousand |
|
| 53) | Sec 137- Failure to file the copy of financial statements with the registrar. | Company
Managing Director and Chief Financial officer In their absence any director charged by the board with the responsibility In the absence of such director all directors |
INR 1 thousand for every day of default
Max: INR 10 Lakhs Max: INR 5 Lakh OR |
Max: 6 Months
OR Both |
| 54) | Sec 140- Failure of the auditor to file the notice on resignation, with the company and registrar & also the C&AG in case of government companies.
The right of representation abused/auditor has acted in a fraudulent manner |
Auditor
Auditor |
Min: INR 50 thousand
Max: INR 5 Lakhs Min: Amount involved in the fraud Max:3 times the amount involved & |
Min: 6 Months
Max: 10 Years *Fraud involving public interest: Min: 3 years |
| 55) | Sec 143 – Failure of the auditor to report fraud by employees against the company | Auditor
Cost Accountant Company Secretary |
Min: INR 1 Lakh
Max: INR 25 Lakhs |
|
| 56) | Sec 147 – Contravention of Sec 139 to 146(aspects related to audit and auditors)
Contravention of Sec 139/143/144/145 |
Company
Every officer in default Auditor Auditor |
Min: INR 25 thousand
Max: INR 5 Lakhs Max: INR 1 Lakh OR Max: INR 5 Lakhs Max: INR 25 Lakhs & |
Max: 1 year
OR Both Max: 1 year |
| 57) | Sec 148 – Default in complying with the orders of the Central Government pertaining to cost audit | Company
Every officer in default Cost Auditor |
Min: INR 25 thousand
Max: INR 5 Lakhs Min: INR 10 thousand Max: INR 1 Lakh OR Max: INR 5 Lakhs |
Max: 1 year
OR Both |
| 58) | Sec 157 – Failure by the company to inform DIN to Registrar. | Company
Every officer in default |
Min: INR 25 thousand
Max: INR 1 Lakh Max: INR 1 Lakh |
|
| 59) | Sec 159- Contravention of:
Sec 152- appointment of directors, Sec 155-Prohibition to obtain more than one DIN and Sec 156-Director to intimate DIN |
Individual/Director | INR 50 thousand OR Further, a fine of INR 500 for every day of default. |
Max: 6 months |
| 60) | Sec 165 – Contravention of maximum no. of directorships | The person accepting appointment as director | Min: INR 5 thousand
Max: INR 25 thousand for every day during which the contravention continues |
|
| 61) | Sec 166 – Contravention of duties of directors. | Director | Min: INR 1 Lakh
Max: INR 5 Lakhs |
|
| 62) | Sec 167 – Functioning as director after attaining disqualification. | Director | Min: INR 1 Lakh
Max: INR 5 Lakhs OR |
Max: 1 year
OR Both |
| 63) | Sec 172 – No specific punishment under chapter XI | Company & every officer in default | Min: INR 50 thousand
Max: INR 5 Lakhs |
|
| 64) | Sec 178 – Contravention of provisions of Sec 177 related to Audit committee and nomination and remuneration committee and stakeholders relationship committee | Company
Every officer in default |
Min: INR 1 lakh
Max: INR 5 Lakhs Max: INR 1 Lakh OR |
Max: 1 year
OR Both |
| 65) | Sec 182- Political contribution made in excess of the limits | Company
Every officer in default |
5 times the amount contributed 5 times the amount contributed & |
Max: 6 months |
| 66) | Sec 184 – Failure to disclose interest held by directors in any company/contract/arrangement | Director | Min: INR 50 thousand
Max: INR 1 Lakh OR |
Max: 1 year
OR Both |
| 67) | Sec 185 – Loan to directors/any other person in whom the director is interested/give a guarantee in connection with the loan taken by the director or such other person in contravention of the provisions of this section | Company
Director/any other person |
Min: INR 5 Lakh
Max: INR 25 Lakh Max: INR 25 Lakh OR |
Max: 6 months
OR Both |
| 68) | Sec 186-Contravention of provisions pertaining to loan and investment by the company. | Company
Every officer in default |
Min: INR 25 thousand
Max: INR 5 Lakhs Min: INR 25 thousand Max: INR 1 Lakh & |
Max: 2 years |
| 69) | Sec 187- Contravention by the company regarding investments of the company to be held in its own name. | Company
Every officer in default |
Min: INR 25 thousand
Max: INR 25 Lakhs Min: INR 25 thousand Max: INR 1 Lakh OR |
Max: 6 months
OR Both |
| 70) | Sec 188 Contract entered into/ authorised in contravention with the provisions outlined under the section-Related party transactions. | Listed Company:
Violation by Director/any other person Violation by Director/any other person |
Min: INR 25 thousand
Max: INR 5 Lakhs OR Min: INR 25 thousand Max: INR 5 Lakh |
Max:1 year
OR Both |
| 71) | Sec 189 – Failure to disclose the interest of the director in any contract/arrangement | Director | INR 25 thousand | 72)Sec 190 – Failure to maintain a copy of the contract of employment with managing director or whole time director/written memorandum in absence of a written contract & also failure to keep it open for inspection without fee
Company Every officer in default INR 25 thousand |
